VOLUNTARY SETTLEMENT

BY A BACHELOR.

sisters, &c.,

of settlor as he

absolutely vested under the foregoing trusts, then IN TRUST for such person or persons being a brother or sister or brothers or sisters, or the issue of a brother or sister or brothers or sisters of the said A. B., and in such manner as the said A. B. shall by deed or will appoint, and in default of such appoint- shall appoint, ment, and so far as any such appointment shall not extend, IN of appointTRUST for the person or persons who, under the statutes for the distribution of the effects of intestates, would have become entitled thereto at the decease of the said A. B. if he had died possessed thereof and intestate.

5, 6. (Advancement and investment clauses, suprà, pp. 293, 294.) 7. THE power of appointing new trustees conferred by statute shall for the purposes of these presents be vested in the said A. B. during his life.

8. Ir shall be lawful for the said A. B. at any time or times hereafter, with the consent of the trustees, by any deed or deeds under the hand and seals of the said A. B. and of the trustees, to revoke all or any of the trusts declared by these presents of and concerning the trust funds or any part thereof, and to declare any new or other trusts of or concerning the same: AND the trustees may give or withhold their consent to any such revocation and new appointment as aforesaid at their absolute discretion, and without being answerable for the exercise of such discretion.

IN WITNESS, &c.

and in default

ment for his

next of kin.

Power for revoke with

settlor to

consent of trustees.

VOL. II.

сс

APPOINTMENT

UNDER POWER
TO CHILDREN.

No. XXXVII.

APPOINTMENT by PARENTS under a POWER in their MARRIAGE SETTLEMENT among their CHILDREN equally, some of such children being of age, and some under age, with POWER of REVOCATION, except as to the share of a SON about to marry (a).

TO ALL TO WHOM THESE PRESENTS SHALL COME, A. B., of, &c., and C. his wife (appointors), SEND GREETING. Recite settle- WHEREAS, by an indenture, dated the

ment.

Construction of powers of appointment amongst

children.

Appointment may be made to trustee for object.;

or, by direc

to persons

who are not objects.

day of

18-,

(a) A power to appoint to children in such proportions as the donee shall direct, is effectually exercised by an appointment of a limited interest to one, and of the corpus of the fund to another. Alexander v. Alexander, 2 Ves. sen. 640; Bristowe v. Ward, 2 Ves. 336. So a general power to appoint a fund amongst the children in such manner as the donee shall direct, or to charge real estate with a sum for portions of children, authorizes an appointment to trustees in trust to pay the income or rents to a daughter for her separate use. Alexander v. Alexander, ubi suprà; Maddison v. Andrew, 1 Ves. sen. 59; Ratcliffe v. Hampson, 1 Jur. N. S. 1104; Thornton v. Bright, 2 My. & Cr. 230; Dickinson v. Mort, Ha. 178. But if there is a restraint on anticipation, and the daughter was unborn at the date of the creation of the power, the Court will reject the words creating such restraint as infringing the rule against perpetuities, and uphold the appointment in other respects. Fry v. Capper, 1 Kay, 170; Re Teague's Settlement, L. R. 10 Eq. 564; In re Cunynghame's Settlement, ib. 11 Eq. 324; Buckton v. Hay, 11 Ch. D. 645; Herbert v. Webster, 15 Ch. D. 610.

Under the ordinary power of appointment among children, an appointment may be made to such uses or upon such trusts as a child, being an object of the power, shall by deed or will (and if the child was born at the time of the creation of the power, but not otherwise, as such child shall by will alone) appoint. Jebb v. Tugwell, 7 De G. Mac. & Gor. 668; Phipson v. Turner, 9 Sim. 227; Morgan v. Gronow, L. R. 16 Eq. 1.

Again, under such a power the fund may be appointed to trustees in trust for the objects of the power (Trollope v. Linton, 1 Sim. & St. 477); and real estate may be appointed to trustees upon trust to sell and divide the proceeds among the objects. Roberts v. Dixall, 2 Eq. Cas. Abr. 668, pl. 19; Long v. Long, 5 Ves. 445; Kenworthy v. Bate, 6 Ves. 793; Fowler v. Cohn, 21 Beav. 360; Cowx v. Foster, 1 J. & H. 30.

Again, under such a power the fund may by the direction of a child, tion of object, either in contemplation of or subsequently to marriage, be appointed in favour of his or her issue, or to the trustees of his or her settlement. Such an arrangement is regarded, first, as an appointment, and then as a settlement by the object of the power. Thompson v. Simpson, 1 Dru. & War. 459. See also White v. St. Barbe, 1 V. & B. 399; Sug. Pow. 670; Limbard v. Grote, 1 My. & K. 1; Morgan v. Gronow, L. R. 16 Eq. 1. And an appointment of this kind made on the marriage of an infant daughter by

and made between the said A. B., of the first part, the said APPOINTMENT C. B. (then C. D.), of the second part, and E. F., G. H. and UNDER POWER I. K., of the third part (being the settlement made in considera

the direction of her intended husband has been held good. Fitzroy v. Duke of Richmond, 27 Beav. 190.

In Wright v. Goff, 22 Beav. 207, a tenant for life had a power of appointing a fund amongst her children. A married woman was the only object of the power, and an arrangement was entered into between the tenant for life and the married woman and her husband, whereby the fund was appointed to her and then re-settled, giving an interest to her children and to a stranger. The husband survived, and the transaction was held to be binding on him.

TO CHILDREN.

of

In exercising a power of appointment among children or other objects, As to fraudu it must be borne in mind that the substantial motive of the appointment lent exercise must be the benefit of the objects of the power, and that an appointment powers. made to such objects with a view not to their exclusive benefit, but for the benefit either wholly or partially of the donee of the power, or any other person, is void, as being what is technically called a fraud on the

power.

children,

In Hitchinbroke. Seymour, 1 B. C. C. 395, lands were settled in strict Appointments settlement, with a limitation of a term to trustees, to raise either in the in favour of lifetime of the tenant for life, if he should so direct, or after his decease, infant portions for his younger children, to be paid at such time as the tenant for who die soon life should direct. The tenant for life directed the trustees to raise the afterwards, sum for an only daughter, being fourteen years of age, immediately. The how far daughter died shortly afterwards, and then the father claimed the sum as good. her administrator; but the Court held that this was a bad execution of the power. It appears, from what was said by Lord Eldon in Macqueen v. Farquhar, 11 Ves. 479, that the father knew that the child was in a consumption, so that the appointment was evidently made with a view to his own benefit; and this must be considered as the true ground of the judgment, rather than that given in Brown's Report, viz., that "it is contrary to the nature of a charge for children to have it raised before it is wanted." In Fearon v. Desbrisay, 14 Beav. 635, personal estate was settled in trust for A. for life, and after his decease for his children, at such ages, &c. as he should appoint, and, in default of appointment, for the children equally at twenty-one, with a power of maintenance and a gift over in case no child should become absolutely entitled. A., having a child eight months old, and another en ventre sa mère, appointed the fund to all his children living at his decease. One of the children survived A., but died an infant, and it was held that the appointment was good, and that the fund passed to the child's mother as administratrix. It will be seen that in this case the donee of the power could gain no personal benefit from the mode in which he exercised it, and there was no evidence to show that the appointment was not made bonâ fide. In Beere v. Hoffmister, 23 Beav. 103, a joint power of appointment amongst children in the usual form was exercised by the husband and wife in favour of an only daughter, who was four years old. The daughter was in good health at the time of the appointment, but died shortly afterwards, whereby the fund passed to her father as her administrator. It was held that the appointment was good; but in giving judgment the M. R. observed that if the father could have made the appointment available for raising money, and had done so, it would have materially altered his view of the case. On the other hand, in Wellesley v. Mornington, 2 K. & J. 143, an appointment was made to an only son, who was then in a state of disease from which he died within a year, and the Court held, upon all the circumstances of the case as proved

UNDER POWER

APPOINTMENT tion of the marriage then intended, and which was shortly TO CHILDREN. afterwards solemnized, between the said A. B. and the said C. D.), it was agreed and declared that the said E. F., G. H.,

Appointment with a view to

benefit strangers.

Suspicion not sufficient to invalidate appointment.

by the evidence, that the appointment was made by the father with a view to benefit himself, and was therefore void. See also Gee v. Gurney, 2 Coll. 486; Salmon v. Gibbs, 3 De G. & Sm. 343.

The result of the above cases seems to be, that an appointment to a child, however young, is not in itself necessarily fraudulent, though the effect may be to give the whole fund to the donee of the power as administrator; but that such an appointment will be held void if from the facts of the case, as, e.g., from the child being in bad health at the time, and likely to die soon, it seems to the Court that the intention of the appointor was to benefit himself, and not the appointee. See Henty v. Wrey, 21 Ch. D. 332.

It is equally a fraud on the power if the appointment is made with a view to benefit a stranger, as, for instance, upon a secret understanding that the appointee shall re-assign the whole or part of the fund to a stranger. Daubeney v. Cockburn, 1 Mer. 626. În Birley v. Birley, 25 Beav. 299, an appointment was made to two children, who, a year afterwards, settled the appointed fund on persons who were not objects of the power, the deed containing a recital that when the appointment was made it was understood that the appointees should consider themselves as possessed of the funds upon the trust expressed in the settlement. The appointment was held void. So, also, in a case where the donee of a power to appoint amongst children executed an appointment in favour of two of her children, and such appointment was made on a previous understanding that they should re-settle the property appointed, firstly, for the benefit of themselves, and finally for persons not objects of the power, the appointment was held to be bad. Prior v. Prior, 10 Jur. N. Š. 603.

If the motive or object of the appointment is to benefit a stranger, it makes no difference that the appointee may be ignorant of such motive or object. Thus, where a married woman, having a power of appointment among her children, appointed the fund by will to her eldest daughter, in order that she might thereout benefit her father (the testatrix's husband), it being arranged between the testatrix and her husband that after the death of the former the latter should inform the appointee of the object of the appointment, leaving it in her discretion to carry out her mother's wishes, the appointment was held bad. In re Marsden's Trusts, 4 Drew. 594.

In a late case, certain appointments made by a father with a view to prevent the marriage contemplated by one of his daughters, and of which he disapproved, were held to be frauds on the power, and void. Topham v. Duke of Portland, 1 De G. J. & S. 517; 11 H. L. C. 32; L. R. 5 C. À. 40. But a mere suspicion that the appointor's motive was to benefit himself or others is not sufficient to invalidate the appointment. Thus, in M'Queen v. Farquhar, 11 Ves. 467, a tenant for life entered into a contract for sale, but finding that he could not make a good title without exercising a power reserved to him of appointing the estate among all or any of his children, he exercised the power in favour of his eldest son in fee. Then the father and mother (who were entitled respectively to life estates), as well as the son, conveyed the estate to the purchaser in consideration of £8,000 paid to the father, mother, and son; it was held that the power was well executed, and that the purchaser must take the title. Lord Eldon observed there was nothing to show that the son was not to receive a due proportion of the money when the contract was afterwards executed by the deed. See also Green v. Pulsford, 2 Beav. 70; Crockforth v. Sutcliffe,

UNDER POWER

and I. K., their executors, administrators, and assigns, should APPOINTMENT stand possessed of certain trust funds therein particularly men- TO CHILDREN. tioned, UPON the trusts therein declared concerning the same

25 L. J. Ch. 313; Hamilton v. Kirwan, 2 Jo. & Lat. 393; Roach v. Trood, 3 Ch. D. 429.

And if the appointment is made with a view to secure a benefit to all the objects of the power, the appointment is not bad, although the donee may to some extent participate in such benefit; as where an appointment was made to one of the objects, and the appointor and appointee then executed a deed to enable building leases to be granted, there being no power to grant building leases in the original settlement, and subject thereto the property was re-limited substantially to the old uses, the appointment was held valid. In re Huish's Charity, L. R. 10 Eq. 5.

Nor does it render an appointment bad that there is a contemporaneous Contempoarrangement with the appointees, provided that their substantial interests raneous in the property are not thereby diminished. Therefore where a tenant arrangement. for life, with a power of selection amongst his children, had received of the trustees part of the trust moneys in breach of trust, and afterwards appointed to his daughters, in exclusion of his son, this money, which had been advanced to him, and a sum of £500, and contemporaneously with the appointment the daughters exchanged the sums so appointed for an estate of the father, the transaction was supported, inasmuch as the estate was not proved to be of less value than the amount given in exchange. Askham v. Barker, 17 Beav. 37.

In a case where, on the marriage of a daughter under age, the father made an appointment to her, and by the settlement the appointed money, and also a further sum secured by the father's bond, was settled on the usual trusts for the daughter and her husband, and the issue of the marriage, with an ultimate trust in default of issue for the father, the appointment was held good, on the ground that all that the father took was the husband's marital right, the daughter not being bound. A similar appointment and settlement in the case of another daughter who was of age was upheld by James, V.-C., on the ground that the father gave a sufficient consideration for the reversionary interest; but the Lord Chancellor on appeal thought the transaction of doubtful validity. Cooper v. Cooper, L. R. 8 Eq. 312; 5 C. A. 203.

Under a power of distribution amongst the children, the appointment of one share corruptly does not invalidate the appointment as to the remaining shares. Rowley v. Rowley, Kay, 242.

made.

Where a power is given to appoint among several objects in such shares Exclusive as the donee may think fit, but he is not expressly authorized to exclude appointment any one of the objects, it was necessary until lately to give some share, how- may now be ever small, to every object; and if one were excluded the appointment was bad. But by the Act 37 & 38 Vict. c. 37, it is enacted that no appointment to be made after the passing of the Act of any property among several objects shall be invalid at law or in equity on the ground that any object of such power has been altogether excluded, subject to a proviso that the Act shall not apply where there is an express provision declaring the amount from which no object shall be excluded.

Where the object of a power is also entitled to a share in default of appointment, an assurance of his share before any appointment is made does not pass a share acquired by him under a subsequent appointment. Sweetapple v. Horlock, 11 Ch. D. 745.

A power to appoint by will may be released by deed; and a covenant by Release of the donee not to exercise the power so as to diminish the share which the testamentary covenantee would take in default of appointment is a release pro tanto, and power.